Paints major hit by 12% volume decline

CIC Paints, the predominant player in the country's paint market in both volume and value, has seen a dip in these indicators in the first eight months of this year vis-a-vis the first eight months of last year due to the country's current economic downturn.

CIC Paints Managing Director Gerald De Saram told The Sunday Leader that the decline in volumes during this period was 12%, while the value decline was less, mainly due to inflation.

De Saram said that CIC has 40% of the local market in volume terms and around 45% in value terms. He valued the local paint market at between Rs. 15-18 billion.

He said that this decline was due to the hit taken by the condominium and housing sector caused by a combination of the prevailing security situation and the high inflationary and high interest rate scenario in the economy.

"The years 2005 and 2006 were some of the best years for the paint industry due to the condominium and housing market boom that existed then, coupled with a relatively low inflationary regime," De Saram said.

This boom, in part, was however fuelled by the tsunami housing sector growth which now no longer exists, he said.

"Some of our premium paints during that period grew at the rate of 12% year on year (yoy) in volume terms, while those of a lesser variety grew at a rate double that number, at 25% yoy, he said.

Then, Sri Lankans living abroad were investing in housing and apartment stocks, with the boom particularly felt along the coastal belt in Colombo and in the neigbouring suburbs along that way in the south, said De Saram.

But with the deteriorating security situation in Colombo, begun in 2006 or thereabouts with bombs exploding in the city, followed by rising inflation, those hit the industry, he said. And, rising building costs are also dampening this market.

People stopped investing in housing and condominium stock.

Inflation at present is over 20%. "Margins are being squeezed," he said. "We are a nation at war."

De Saram said that between 65-70% of the demand in the paint industry is from the housing stock, 20-25% from the re-finished paints market, ie vehicles, and 10% from the industrial segment.

The high interest rate regime is also a dampener to the housing market, he added.

"But despite this gloom and doom situation I remain an optimist," said de Saram. Bombs no longer explode in Colombo due to the heightened level of security," he said. De Saram expected an era of "absence of war" to dawn, as, what is now present in the East, where the LTTE would once again be forced to resort to hit and run tactics, as opposed to conventional warfare.

"And CIC's associate company, the CIC Group which has a 49% equity stake in CIC Paints, plans to invest in two projects in the recently cleared East, one a dairy project and the other, a banana cultivation project," De Saram said. People will then get jobs and the economy will grow, he said.

Inflation to surge 

CB set to resubscribe to T. Bills

Central Bank (CB) is set to re-purchase Treasury Bills (T. Bills) at this week's auction thereby increasing market liquidity and with it, keeping a check on interest rates, but the downside is that this would cause inflationary pressure, market sources who did not want to be named told The Sunday Leader.

Currently inflation is running at 20% plus.

In a market starved of liquidity (the market, on a cumulative basis has been short of Rs. 34.5 billion in the past eight consecutive market days) has forced the CB to open its overnight reverse repurchase window and lend to the market in an interest rate mix comprising the 12% concessionary lending rate and the 19% penal rate-for those who had exceeded their limits, to meet liquidity requirements.

The present market illiquidity is believed to be caused by heavy government borrowings in order to meet its rising expenditure needs, primarily fuelled by the war.

But this has made interest rates to move up.

At last week's T. Bill auction, the weighted average yields (WAYs) of 91 day T. Bills moved up by 82 basis points (bp) to 17.22%, those of 182 day T. Bills by 83 bp to18.28% and those of a 364 day maturity by 72 bp to 19.06%.

Sale of T. Bills is a popular way for the government to find money from the domestic market to meet its expenditure needs.

However, in the previous week's primary T. Bill auction, when the market quoted for T Bills of 364 day maturity at 17.75%, the CB rejected such bids, but last week they accepted bids for this tenure which were even as high as 19.50%, giving the wrong signals to the market, they said.

Meanwhile, the CB, which did not put out for re-issue maturing T. Bills of a 91 day tenure for the past four to five weeks in the weekly primary T. Bill auction, however made available that maturity too for re-issue at last week's auction, which saw its WAY surge by 82 bp to 17.22%.

"As such investors are going to bid high at this week's auction," the sources said.

This auction, similar to last week's T. Bill auction, will have for re-issue Rs. 10 billion worth of maturing T. Bills, with the splits comprising Rs. one billion worth of maturing T. Bills of a 91 day tenure, Rs. four billion worth of maturing T. Bills of a 182 day tenure and Rs. five billion worth of maturing T. Bills of a 364 day tenure.

"However, the CB, in order to curb interest rates is going to subscribe to those, at rates lower than that which the market is demanding," they said.

"There are no captive funds to subscribe to these maturing T. Bills, those have reached their zenith in making such investments, they have no more capacity to take," they said.

Captive funds are those funds that are controlled by the government such as the two state commercial banks, National Savings Bank and the EPF and ETF funds.

As such the CB will be forced to take-up the majority of those maturing T. Bills in order to curb rates. But that will have a double-barrelled effect on the market, ie whilst fuelling liquidity, at the same time causing inflationary pressure, they said.

Meanwhile, in the secondary market, T. Bonds maturing in July and August 2010 (the shorter tenures) had surged by nearly 100 basis points to be trading closer to the 19% levels (it was 18.60% on Friday) since September 17, after a foreign bank allegedly set the ball rolling by disposing of their T. Bond holdings, with the others, following herd like, also beginning to dispose of their T. Bond holdings, resulting in the secondary market asking for higher and higher yields, for the purchase of such T. Bonds, they said.

That foreign bank saw the writing on the wall, now others are following suit, adding further upward pressure on interest rates in the secondary T. Bond market, the sources added.

Therefore the time is now ripe for the CB to subscribe to those maturing T. Bills in order to provide liquidity to the market, they said.

CB's T. Bill holdings which were a high of Rs. 60 billion a year ago has since come down to Rs. one billion, giving them room to re-enter the market, they said.

CB sources who did not want to be named, admitted that they were studying this option, but remained non-committal in regard to the course of action that they would take at this week's primary T. Bill auction.

Lubricant sales volumes drop 9%

The local lubricants industry witnessed a 9% year on year (yoy) drop in volume terms in the first eight months of the year, with a key industry player warning that the "survival of the fittest" law would prevail in such a scenario.

"With 14 players in the local lubricants industry, in a market that is retarding, there is a likelihood that the 'survival of the fittest' law would prevail, Kishu Gomes, Managing Director of Chevron in Sri Lanka told reporters on Wednesday.

He told The Sunday Leader that if such a situation develops, the market would end up with only two or three players.

And markets in the North-East are virtually zero further aggravating the problem, he said.

Ceylon Petroleum Corporation is also planning to enter the lubricants markets, he said. Chevron by far however is the biggest player in the local lubricants market, with some 85% market share.

The company in the 2007 financial year saw revenue grow by 12% year on year (yoy) to Rs. 8.7 billion, while profit after tax grew by 34% yoy to Rs. 1.1 billion.

Gomes put the local lubricant market's value in volume terms at 47 million litres.

However, the industry's volume growth is being squeezed due to the downturn in the economy, coupled with the stagnant growth in the vehicular industry, he said. According to Gomes, vehicles contributed to 60% of lubricant sales and industrial, the balance 40%.

But in contrast, Chevron's exports, in particular to Bangladesh and the Maldives however are growing.

The company also exports to its associate company in India, with exports contributing to 10% of the company's overall volumes. Chevron however is not physically present in Bangladesh and the Maldives, with the former having a large informal (grey) market, which, according to some estimates, is about 50% of that market's size.

Meanwhile Gomes said that they paid a total of Rs. 2.6 billion as government levies and taxes last year, with this figure expected to go upto Rs. 3.2 billion this year.

He however said that it was not feasible to try to gain tax concessions under the government's 300 factories programme by relocating their operations to "difficult" areas due to logistical problems.

"If you are thinking of ports, crucial for this type of operations, then, Colombo is 60% of the market, while the other port player which is Trincomalee comprises only 3% of the market," said Gomes. Therefore it's not feasible to re-locate, in order to get tax benefits, he said.

 LIOC however has the advantage of the Trincomalee tank farms, which have been leased out to them, as such they have their lubricant blending operations there, a process that began late last year.

Chevron has their blending plant in Kolonnawa and their base oil tank farm in Mutwal. Base oil, together with additives make lubricants.

Gomes warned of the birth of a grey market in Sri Lanka as well, and said that the country has some time to go before it becomes a brand conscious market. He said that the danger in using spurious lubricants is that it could damage vehicle engines.

They have been helping law enforcement authorities to make such detections, where there had even been instances, where such spurious lubricants had been sold as branded lubricants in the market.

The lubricants regulator is the Public Utilities Commission of Sri Lanka (PUCSL). He alleged that the PUCSL uses their laboratory to test the quality of lubricants in the local market.

"Being part of a multi-national corporation, helps us to piggy-back on economies of scale," Gomes said. Fifty one per cent of the company's equity is held by its parent company, Chevron, a global operator in the petroleum industry. The rest of the shares are held by the public.

Meanwhile, the government is one of their biggest customers, among those being the armed forces, Railway, CTB and the CEB; as well as independent power producers.

Consumer spending shrinks

Inflationary pressure is hitting the purse of the consumer.

Macro economic indicators and consumer health indicators from a business end were mirroring different sets of results. Despite Sri Lanka's economy expanding by 7% in the second quarter of 2008 according to the Central Bank, research data indicates that the quality of life of a typical Sri Lankan is dropping.

Economic strategist and business personality Rohantha Athukorala addressing the Sri Lanka Economic Association  (SLEA) sessions 2008 posed the question if Sri Lanka is actually growing. His argument was that even though there is a strong GDP growth that Sri Lanka is registering in 2008, the movement of consumers from key household categories due to inflationary pressure, can lead to one asking the question if Sri Lanka is actually growing?

His argument was that macro economic and consumer health indicators from a business end was mirroring different sets of results.

Athukorala said as per household data from Lanka Market Research Bureau, reveals that inflationary pressure is hitting the consumer's purse. Powdered soft drinks penetration that had increased by 30% in 2007 had dropped by 23% in 2008 which means that households are moving out of the category.

5% of households had moved out of the consumption of cordials.

And 19% from jams which were all demonstrating a high penetration growth last year. On the Personal care sector, the use of shampoo had dropped by 3% as against the12% growth experienced in 2007.

 On volume too for instance shampoos that was depicting a positive growth by 23% in 2007, has seen reduction in the growth to 7% in 2008 which means overall consumption is dropping. '

Athukorala said that the challenge for policymakers is to determine the balance that needs to be maintained between Inflation and Growth in Sri Lanka as a 15.8% inflation in 2007 was able to drive a growth of 6.8% whilst Bangladesh with an inflation of 8.4% propelled a 5.6% GDP growth. "We need to not only play the number game but also understand the implication to the quality of life of a Sri Lankan," said Athukorala.     Organizations must yet invest on R&D to drive innovative products to be launched to meet changing consumer requirements, he however said.

The private sector must also get linked to the national agenda, he said.

Victory when?

The Colombo bourse, dogged by foreign inactivity as a whole due to the global financial crisis, has been on the backfoot as a result this month, market sources told The Sunday Leader.

Foreigners are not looking at Sri Lanka because of the global downturn, they said. And added to that the island has its own share of problems like rising inflation and interest rates, coupled with the war, the sources said. Victory in the warfront is in sight, but something "radical" on that score is yet to take place to give the bourse that boost, they said. They predicted that market decline would continue in the new week beginning tomorrow as well.

Meanwhile, the market, since the beginning of this month and upto Friday has seen the benchmark ASPI lose 199.13 points, while the more sensitive MPI has lost 300.42 points. Market capitalization during this period has come down by Rs. 62.8 billion, while daily turnover during this month has been averaging a lowly Rs. 192.2 million to date. Total foreign purchases for the month upto Friday has been Rs. 1.5 billion. But if a "one off" foreign purchase figure of Rs. 923.3 million made on September 16 is taken out, then, foreign purchases made so far for this month amounts to a mere Rs. 576.7 million.

Similarly if the turnover of Rs. one billion made by the bourse on September 16 is taken out, then, average daily turnover so far for the month is a mere Rs. 149.7 million.

Meanwhile, foreign sales to date made for this month amounted to Rs. 396,5 million.

Though there is a net foreign inflow, that has to be looked at in the light of turnover figures, which is very low, they said.

Speedy registrations

The Colombo Municipal Council (CMC) has introduced a new module for businesses to obtain a license to operate and trade. If the criteria are met, the license will be issued in under 25 days.

These are in respect of business enterprises in Colombo that have been operating without a trade license from CMC.

According to the World Bank's (WB's) Doing Business indicators, obtaining licenses and permits for starting a business in Colombo takes more than 160 days and involves 17 procedures. The lengthy process undermines efforts to promote small and medium enterprises, private investment, and private sector development.

Licenses are issued by CMC to 148 different business categories, the majority being catering establishments and restaurants, barber and hairdressing saloons, vehicle repair shops and garages, LP gas stores, tailoring establishments and manufacturing facilities.

IFC, a WB member, assisted CMC to simplify the issuance process for businesses.

Hayleys at UN

A Sri Lankan company was chosen as one of four private sector representatives worldwide to address Secretary-General Ban Ki-moon at the opening plenary session of the first United Nations Private Sector Forum on Millennium Development Goals (MDGs) and Food Sustainability. Representing Hayleys PLC, Group Chairman N. G. Wickremeratne spoke on 'Water Access and Management,' the theme assigned to the first of seven roundtable discussions initiated by the UN Global Compact Office.

Four Heads of State, Chairmen and CEOs from 33 international companies, the heads of 17 global business associations, 16 civil society organisations and foundations and 17 UN agencies and senior bureaucrats from four governments attended the September 24 event in New York. Among those who participated in this effort to tackle the impending global food crisis were former US President Bill Clinton, Sir Bob Geldof, World Bank President Robert Zoellick, Howard G. Buffett, WFP Ambassador and son of Warren Buffett; Intel Chairman Neville Isdell, Coca Cola Company Chairman Lord Michael Hastings, Craig Barrett (KPMG), Ericsson Chairman Carl-Henric Svanberg and International Chamber of Commerce President Guy Sebban.

Alternative fuels

Sri Lanka Ceramics Council organized a seminar recently on the topic "Alternative Fuel Resources-Have you explored all options" at the Cinnamon Grand Hotel.

It was organized in order to encourage ceramics and other industries that are heavily dependent of fossil fuels, to convert all or part of their operations to alternate fuels such as Dendro or Gasified Coal.

The ceramics industry is a high consumer of energy and is finding it difficult to remain competitive with other countries in the region like Thailand and China. Energy costs form one of the highest components of manufacturing cost. The recent energy price increases have created enormous problems to the industry, severely eroding its profitability.

The seminar was well attended by ceramic sector senior managers and covered presentations on the possibilities and advantages of switching to alternate fuel resources, with special emphasis on process modifications and additional equipment for such conversions. They also discussed the available financial and other support for such conversions.

Rebranding exercise

Mindshare, the global marketing and media network, on Wednesday unveiled a comprehensive worldwide rebrand of its corporate identity.

The redesign, developed in partnership with branding agency Moving Brands, coincides with the WPP agency's ongoing global restructure announced earlier this year.

The network's branding retains the signature colour purple, which was established at its inception from the merger of JWT and Ogilvy & Mather media departments in 1997, but includes a refresh of the agency's brandmark and visual identity.

The symbol has been created to reflect the structure and form of Mindshare's business. It shows two forms coming together to create a "new, strong" form reflecting Mindshare's partnerships with clients, suppliers and other agencies. The flow of colour symbolises the flow of creativity across the business and the segmentation mirrors the bringing together specialist expertise within Mindshare's "open source" approach to client business which enhances a platform neutral approach.

In visual form on the printed page, this will represent the agency's new approach, re-engineering its structure from more than a dozen separate specialist departments to four integrated, collaborative groups: Client Leadership, Business Planning, Invention and The Exchange.

Mindshare Worldwide chief executive Dominic Proctor said: "When we launched we wanted to be the agency of the future. After 10 years that objective is stronger than ever. To prepare us for that future, today we unveil our new branding, which is a further indication of our ambition indicated by our ongoing global restructure."

Managing Director Sri Lanka Pratibha Vinayak said: "The new corporate identity reflects our focus in partnering our clients in the emerging areas of marketing investment planning and helping create and run integrated 360 marketing programmes by becoming almost like their marketing spine."

English & private sector

This refers to the news item with the heading "English, least important" which appeared in the Business  pages of  The Sunday Leader on September 21, 2008.

This caption may create the impression among the readership that English is not important for private sector employees.

As correctly reported in the body of the news item, private sector requires their employees to be able to communicate in English.

However, it is not about a high degree of fluency in spoken English, rather it is about effective communication.

It is necessary to encourage persons of high intellect and ability with a working knowledge in English to seek employment in the private sector and while in employment to build up their level of fluency in spoken English.

Dr. Anura Ekanayake,

Vice Chairman,

Ceylon Chamber of Commerce

Business Editor's Note: Then why did Ekanayake, in the course of his reply to the question of the role of English in the private sector say that language is the least important?

Three win "Miles"

A stroke of good fortune saw three Emirates passengers in Sri Lanka win 250,000 Skywards Miles from the frequent flyer programme.

By booking their travel online, the three passengers qualified for a draw which resulted in travel during the months of May and June 2008 had an equal winning chance.

The first prize of 100,000 Skywards Miles was won by Master Jamieneil Maddock, while the second and third prizes of 75,000 Miles each went to Dishan Wickramaratne and Mrs. Lucy Emerton.

The Skywards Miles won at this promotion were in addition to the miles each of these passengers earned in respect of their flights. The Skywards Miles won and accumulated can be redeemed for free air tickets or many other benefits offered by Skywards, including upgrades, hotel accommodation, excursions, exclusive shopping and fine dining.

Emirates operates 17 services a week from Colombo to Dubai and four services a week from Colombo to Singapore and Jakarta.

TOYP awards

HSBC JCI TOYP awards ceremony was held recently at the Cinnamon Grand Hotel with British High Commissioner for Sri Lanka and Maldives Dr Peter Hayes as the chief guest and HSBC Sri Lanka and Maldives Chief Executive Officer Nick A Nicolaou as the guest of honour.

HSBC JCI TOYP award winners for this year included: Legal Accomplishment: Chrishmal Warnasuriya; Academic Accomplishment: Dr Jayanie Bimalka Weeratna; Contribution to Arts: Ms Nadeeka Chandrasekara; Contribution to Media: Sanath Nandana; Humanitarian Service: Ashan Pravin Malalasekara; Voluntary Service: Rohitha Matararachchi; Technological Development: Dr Kalum Udagepola;  Medical Research: Drs.  Neil Darrel Fernandopulle and Vajira Dissanayake and Personal Accomplishment-Sports: Kumar Sangakkara.

Another one joins Singer

The extensive island-wide branch network of Singer Sri Lanka has joined the bill payment network of Lanka Bell.

Cash or credit card payments made to any of 350 Singer outlets will now be credited to Lanka Bell subscribers' accounts. The new arrangement will result in Lanka Bell's bill settlement network growing to more than 2,200 outlets.

Singer already retails Lanka Bell connections and offers easy payment schemes to buy them.

New orders

Colombo Dockyard has attracted new orders for ship building which would improve its revenue in the coming quarters. There is a strong growth in orders from Indian companies predominantly in relation

to ship repairs. 60% of the company's customer base is from India while orders from Pakistan and Singapore companies are also on the rise.

The company in the second quarter (2Q) ended June 30, 2008 saw revenue grow by 27% year on year (yoy) to Rs. 2.1 billion, while net profit in the Q under review grew by 112% yoy to Rs. 393 million.

Dockyard, in the first half (1H) ended June 30, 2008 saw revenue grow by 39% yoy to Rs. five billion, while net profit grew by 68% yoy to Rs. 821 million. (Source John Keells Stock Brokers)

SCB & T Bond sales

Standard Chartered Bank (SCB) in reference to the article that was published on these pages last week under the heading "SCB sells T Bonds"  says that the information presented is inaccurate.

It further said that the facts and figures quoted in this article are incorrect. The periodic sale of Treasury Bonds is natural for any financial institution and is in no way connected to any financial market situation as insinuated in the article.

It also said that they have a long standing business relationship with The Sunday Leader and an article of this speculative nature was published without first approaching the Bank for verification.

Business Editor's Note: SCB neither confirms nor denies that they sold Treasury Bonds (T Bonds) on September 17 as was said in that article, other than saying that the periodic sale of Treasury Bonds is natural for any financial institution.

Nor does SCB give the "correct" facts and figures other than saying that The Sunday Leader had got those wrong.

The relevant excerpts of our last week's article said that yields of T Bonds maturing on July 1, 2012 went up by 20 basis points allegedly because SCB Colombo branch began disposing of their T Bond portfolio.

This rise may be due to the sub prime mortgage crisis which is hitting U.S. and European financial markets, as a result of which SCB Colombo Branch may have had received instructions from their regional office to dispose of their T Bond portfolio.

HNB, United Motors tie-up

United Motors Ltd (UML) recently joined hands with Hatton National Bank, a premier commercial bank with over 173 customers centres spread islandwide, to promote Canter Trucks through a specially designed leasing package. The package offers a special price coupled with lowest lease rentals.

Imports grow twice as fast as exports

Export earnings surged by 24.1% in July 2008, reaching the highest ever recorded value of US$ 849 million, following the marginal decline witnessed in June 2008.

At the same time import expenditure increased by 52% yoy to US$ 1,262 million in July 2008. Substantial increase in oil prices raised the imports of petroleum, fertilizer and chemical products in July 2008. The highest monthly average price of imported crude oil, US$ 134.34 per barrel, was recorded in July 2008. This compared with the imported oil price of US$ 71.25 in July 2007. Textiles and diamond imports were also instrumental in raising import expenditure on intermediate goods which is an indication of continuous growth in the apparel and gems and jewellery exports in the future.  In consumer goods sector, growth in food and beverage sector outweighed the growth in other consumer goods, mainly due to wheat imports.

The increasing trend in the import of investment goods imports continued further, as a result of on-going high investments by both, the public and private sectors, with marked increases in building materials and machinery and equipment. The cumulative expenditure on imports during the first seven months of 2008 increased by 35.4% yoy to US$ 8,267 million. Non-oil imports during this period amounted to US$ 6,178 million, which is a 27.2% yoy increase over the corresponding period last year.

Meanwhile agricultural exports grew by 54.7%, bolstered by a 70% share of tea, as a result of both improved prices and higher volumes.

Tea prices which have been on an increasing trend from early 2007, increased further, pushing the average tea price to US$ 4.17 per kg in July 2008.  Minor agricultural exports also grew at a faster pace relative to other agricultural exports, supported by strong performances in vegetables, fruits, cloves, cinnamon and unmanufactured tobacco.

Apparel exports which suffered in June 2008 showed a turnaround in July 2008, recording a 17.6% growth. Food and beverages, petroleum and rubber based products were among the other industrial products that performed well in July 2008. Cumulative export earnings in the first seven months of 2008 were US$ 4,737 million; recording a 12.1% year on year (yoy)  growth.

The trade deficit reached US$ 414 million in July 2008 compared to a US$ 146 million deficit in July 2007.

Beruwela's losses up 34%

Beruwela Walk Inn, a non operational company, in the 2Q ended June 30, 2008 saw its losses increase by 34% yoy to Rs. 7.06 million. The company in the 1H ended June 30, 2008 saw its losses increase by 37% yoy to Rs. 14.58 million.

HNB Assurance among the top

HNB Assurance, a Hatton National Bank subsidiary, started back in 2001, heralded the dawn of a new era in insurance.

Though the company is just seven years old, the last year has seen HNB Assurance's turnover and net profits increase by an incredible amount, which includes an increase in life insurance premium earnings from Rs. 503 million in 2006 to Rs. 768 million in 2007-and has become a major player in the insurance industry field.

The company has gone through a period of transformation, from a relatively small new entrant to a company with a significant market presence. The company's impressive performance over the last six months with regard to turnover and profitability is only proof of the immense potential that lies ahead. 

The Sunday Leader speaks to HNB Assurance PLC Managing Director Manjula de Silva about the company's latest progress.

Question (Q): What growth has HNB Assurance made in terms of turnover over the last 6 months?

Answer (A): HNB Assurance has produced impressive results by achieving a 33% growth in its turnover as of June this year. General Insurance grew by 19% to record Rs. 417.5 million while Life Insurance grew by a staggering 51% to reach Rs. 443.8 million. The combined turnover amounted to Rs. 861.3 million. We hope to reach Rs. 2 billion by the end of this year.

Q: HNB Assurance has done remarkably well in the Life Insurance sector when compared to the General Insurance sector, how do you explain this?

A: We see more potential in Life Insurance and we are very selective of General Insurance. I think the main reason we have done well in Life is due to the fact that we have a strong presence in rural areas and were among the first to tap the rural market and we place much emphasis on this area whereas most other insurance companies are concentrating on Colombo.

Q: How do you see HNB Assurance positioned in the market today?

A: In an industry dominated by giants, we are coming up almost unnoticed. We are ranked 6th among all the 14 insurance companies, which means we're already in the upper half. We were also recently ranked 57th in the top 100 brands in the country by LMD and Brand Finance and received an 'A (lka)' rating by Fitch, being only the 2nd insurance company in the country to earn such  recognition. This is huge for a company of our size and age.

Q: Has HNB Assurance launched any new products/services?

A: We are trying to do more for our customers in this area. Motor Guard, one of the company's most successful schemes to date was re-launched recently with additional features. It's now a vehicle insurance package which includes on site inspection of the damaged vehicle requiring no police report for claim settlements, access to company recommended garages, a 24 hour hotline for motor claims and a No Claim Bonus (NCB) which goes up to 75% within just six years. Because accidents are inevitable in a country such as this with so many vehicles on the road, we felt it is unfair to penalise people who have just one accident in a year. So if a policyholder has just one accident then he's not penalised and is entitled for NCB but if he has more than one in a year then he'll just have a lesser amount in the NCB. Also if a policyholder has two vehicles, he will be entitled to the same NCB on the second vehicle.

Through the "Motor Max" product, we offer HNB Leasing customers one motor insurance policy for the entire duration of the lease.

Q: Do you have any insurance investment plans?

A: Super 5 is a five year Life Insurance policy which guarantees 200% (twice) of your initial investment at maturity and in the sudden demise of the policyholder, even if it's the day after the investment, the beneficiaries will received twice the amount deposited and in the case of accidental death will receive three times the amount.

Q: What about policies that see to the need of children's education?

A: We have a product called Scholar, and this is targeted at parents with children in international schools because we felt that there was a dire need for a policy that will continue a child's education in the case of their parent's demise. This policy ensures the payment of school fees which is a blessing for parents and schools.

Q: Are there any special provisions for motor vehicle owners?

A: We have realized that most vehicle owners (especially motor cycle owners) happen to be the sole breadwinner of the family and for the most part don't have a life insurance cover. So we provide a cash grant of Rs. 250,000 in the event of death where the spouse may be unemployed and the kids are in school.

Q: What is HNB Assurance's reach like in the country?

A: HNB Assurance has a total of 40 branches that are spread across the island that reach places like Batticaloa, Kalmunai, Jaffna, and Vavuniya. In addition, we obtain business through the HNB's bank network numbering over 170 branches. We also have a strong team of insurance advisors, over 2000 in fact.  

Q: What new CSR initiatives has HNB Assurance embarked on?

A: We have many initiatives underway. We have so far undertaken the task of providing water to four schools and another six should be complete soon. We're also working with the railways in putting up mirrors at unprotected level crossings and if that proves successful we will put up more.

We'll also be publishing a children's book by Somalatha Subasinghe and another book on fire prevention by S.K. Kariyawasam.

CRTU completes a year

Sri Lanka's only state-of-the-art private radiation treatment facility for cancer patients completes one year of operation this month and its owner Ceylinco Healthcare Services Ltd. (CHSL), reports that its first year was well above-target.

The Ceylinco Radiation Treatment Unit (CRTU) at Park Street, Colombo started operations on September 11, 2007 with Sri Lanka's first Linear Accelerator (Linac), the international Gold Standard in the delivery of accurate, intensity-modulated radiation therapy for the treatment of many forms of cancer.

The Unit has in its first year dispensed 439 radiation treatments, 313 of which were from Linac.

This included the first ever IMRT (Intensity Modulated Radiation Therapy)carried out in Sri Lanka, a landmark, that, according to Senior Oncologist and the Centre's Medical Director Dr. Sarath Abeykoon demonstrates that patients can undergo  high quality radiation treatment in Sri Lanka, thereby making overseas travel unnecessary and enabling substantial savings.

 "The bold decision by the Ceylinco Healthcare Centre to invest in an ultra-modern radiation treatment unit has filled a void in the local

healthcare infrastructure," Abeykoon noted, disclosing that the need for a second Linac has been identified.

The six-storey, 19,000 square-foot CRTU comprises a concrete bunker built to specifications provided by the Atomic Energy Authority, the Linac and two reception areas on the ground floor.

The upper floors house the Brachytherapy unit, Mould Room, CT Scanner and CT Simulator rooms, Computerised Treatment Planning unit, Iodine Treatment unit, doctors' rooms, two wards and individual patient rooms and suites.

The unit also offers facilities for chemotherapy treatment, administered in a comfortable, "non-hospital" atmosphere.

"Global Pay"

Global Payments Asia-Pacific Ltd (Global Payments), a joint venture between Hongkong and Shanghai Banking Corporation Ltd (HSBC) and U.S.-based Global Payments Inc. (NYSE: GPN), has introduced a secure GPRS-powered mobile payment service called Global MobilePay that provides mobile card acceptance capabilities for merchants in the Asia-Pacific region.

 Global Payments is one of the first payment processors to launch a mobile payment solution for merchants across Asia.  This service is now available in Brunei, China, India, Malaysia, the Maldives, the Philippines, Singapore, Sri Lanka and Taiwan.   Global MobilePay is a sophisticated card acceptance solution that uses GPRS wireless communication network for merchants that need to accept card payments beyond fixed locations or when traditional land line communication do not meet business needs. Merchants can now conduct face-to-face transactions anytime and anywhere.  Through Global MobilePay, Global Payments now provides a package that includes a mobile payment terminal, SIM card and GPRS network connectivity through a telecoms partner as well as payment processingservices.  This new offering from Global Payments is for merchants who need to accept card payments away from a retail countertop, such as cash-based delivery service providers or trade show exhibitors.  With Global MobilePay, mobile merchants can now accept electronic payments to improve customer service and reduce the cost of handling cash significantly. For merchants in hospitality industries, Global MobilePay can help enhance customer payment experience. 

New processing centre

Continuing the fast paced stride in enhancing and developing the support services of the Bank, Nations Trust Bank PLC (NTB) recently unveiled its new processing centre, an eight storeyed office located in Kotahena.

The Processing Centre serves as the base for the Bank's operations and process team from Information Technology, Call Centre, Operations as well as numerous other key back office functions that play a pivotal role in the day to day functioning of the Bank. The new architect designed office features a two storeyed car park, in addition to plush interiors and work stations, several meeting rooms, break out areas for staff as well as a restaurant style canteen.

The building offers a picturesque view of the city and has been designed with the intention of providing staff, often working late hours on shift basis, the convenience of a comfortable office environment.

The new premises were opened by NTB Chairman Ajit Gunawardene in the presence of the Bank's board of directors, corporate management as well as staff and guests..

 Gunawardene said, "NTB began operations almost nine years ago and has made great strides in becoming a formidable force in the industry. We are delighted to offer our process and operations centric staff a spacious new office and plush surroundings that will serve as their new home away from home."

NTB Director/Chief Executive Officer Zulfiqar Zavahir said, "It is with a sense of pride that we open our new Processing Centre. The Bank has forged ahead at a commendable pace, and the commitment to provide our customers with flexibility and convenience will continue to be the key drivers. This building marks a new chapter for the Bank and we are pleased with the response and positive reactions by the staff located at the new premises."

Toroid signs up Microsoft

Toroid International (Pvt) Ltd., a transformer manufacturing company has entered into an Enterprise Agreement with Microsoft Sri Lanka, to ensure "faster return on investments and empowering it with better risk management capabilities."

Toroid becomes the second organisation in the Katunayake EPZ (Export Processing Zone) to sign an Enterprise Agreement directly with Microsoft Sri Lanka. The agreement is specifically targeted at large scale business entities, companies having 250 or more desktops.

Toroid Managing Director Bo Lindberg says: "The Enterprise Agreement creates more value for our customers as well as reduces risks of license non-compliance and associated costs. Moreover, Toroid will have immediate access rights at all times during the terms of our enrolment to the most current versions of the enterprise platform products elected in the agreement. We look forward optimistically to achieving multi-fold benefits with this partnership with Microsoft."

Originally a Swedish company, Toroid merged with a Norwegian company, Noratel in 2005, which serves the European market with operations in 12 countries. Toroid runs three manufacturing plants in close proximity to each other in the Katunayake EPZ and is equipped with technical expertise and machinery to cater to meet quality manufacturing demands.

Toroid has now grown exponentially in terms of plant, machinery and staff over the years, strengthening its market share in the USA and Europe.

To improve productivity, communications and collaboration with and among its group offices and customers, Toroid standardised its information infrastructure on Microsoft server and desktop software, thus signing up for a Microsoft Volume Licensing Enterprise Agreement. Through the Enterprise Agreement, Toroid simplified its license management, reduced licensing costs, gained predictable budgeting, maximized value from software expenditures, and is able to more efficiently deploy new technologies.

The organisation found that to maintain its competitive advantage through rapid growth, it needed to equip its workers with consistent software tools. Further, the company also wanted to streamline administration and support, while maintaining predictable IT costs.

The Enterprise Agreement moreover simplifies license tracking, which is an advantage in a scenario where there is mounting legal action against illegal software being sold to unsuspecting clients by software dealers.

Under the Enterprise Agreement, all users are provided access to the latest Windows operating system and the 2007 Microsoft Office. IT support can take advantage of features such as free software upgrades to strategically plan the company's new business requirements as and when they need to. In addition, an Enterprise Agreement offers significant savings on desktop licensing costs and provides Software Assurance benefits such as upgrade rights, training and more.

Technology boosts growth

A small increase in the number of mobile phone and internet users can boost GDP growth substantially, Ambassador of Norway in Sri Lanka Tore Hattrem said.

Addressing the Sixteenth Business for Peace Forum organized by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) and held recently, he said that interconnectivity is the essence of a modern economy.

Information and communication technology play a central role in economic growth and productivity.

Hattrem said that a culture that stimulates innovation should be adopted.  The first step towards adopting an innovation culture is to import existing technologies and adapt them to the location situation. For Sri Lanka to capture the benefits of the knowledge economy, it will need to improve the quality of education and expand access to higher education and vocational training.

He said that island could learn from countries like Korea, Singapore and China; three countries at different stages in their development of a more knowledge based economy.

Hattrem said that Sri Lanka's overriding problem is not of an economic nature but political-to find a political solution to the violent internal conflict which has ravaged the country for almost 30 years.

He also said that only the private sector in a market economy combined with good governance can achieve high economic and social development. Hattrem said that the public sector must move out of areas which are better handled by the private sector.

Public sector should involve in developing infrastructure, introducing a climate necessary for growth, investing in education and other essential services, he said.

Hattrem said that according to a recent study by the World Bank, the time is now right for Sri Lanka to begin transitioning towards a knowledge-based economy.

Application of knowledge has always been pivotal for development and studies have shown that simply adopting widely available technologies in the developed world can dramatically boost economic growth and productivity, he said.

He said that countries should focus on creating a good business environment to create initiatives for business to be creative and innovative.

Appointments

Janaka Kumarasinghe was appointed as the Secretary General of the Asia Pacific Federation of Human Resources Management (APFHRM) for the next two years at its meeting held at Wellington, New Zealand, recently.

APFHRM comprises 15 member countries namely Australia, Bangladesh, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Papua New Guinea, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Saudi Arabia.

Kumarasinghe is an APFHRM and IPM Past President. Peter Wilson of Australian Human Resource Institute will be APFHRM President for the next two years.

SLANZBC Office-Bearers

John Keells Holdings PLC Director Sumithra Gunesekera was elected President of the Sri Lanka-Australia-New Zealand Business Council (SLANZBC)  at its AGM held recently.

Vice Presidents:- Senaka Silva ( CEO Saraa OS Leather); Ramya  Perera (Business Development  Manager, Infotechs  Ltd.); Mark Francis (Executive Director, Malship (Ceylon) Ltd.) and Lionel Silva  (Chairman, Lidechsi (Pvt) Ltd.).

Committee Members:- Ms. Aban Pestonjee (Abans Ltd.,), Anton Godfrey (AG International (Pvt.) Ltd.), Sarath Fernando (Asia Pacific Golf Courses Ltd./Waters Edge), Rajitha Kariyawasn (Ansell Lanka (Pvt) Ltd.), Susantha Pinto (Ceylinco Renewables (Pvt) Ltd.), Achyut Reddy (Fonterra Brands Lanka (Pvt) Ltd.), Shirantha Peries (Mega Pharma (Pvt) Ltd.), Jerome La'Brooy (Prestige Foods Lanka (Pvt) Ltd.), Miran Wickramasuriya (Sunpower Systems (Pvt) Ltd.) and Lalith Senevirathne (Westmann Engineering Co. Ltd.).

Adawatte  also secured the number one position in Uva catalogue in NSA for year 2007 and is led by Superintendent Shamil Perera, Snr. Asst. Superintendent Manoj Pathiranage, and Factory Officer K.A. Percy.